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Sunday, May 12, 2013

Happy Mother's Day (With an Emphasis on Managing "MOM") ... Financial Lessons for Moms, Children (and Dads as Well)

Mother's Day is a biggie. So let's give a big thanks to all the mothers for doing everything, including raising and putting up with us as their children (which both by definition and biology 100% of us are or at least once were).

We'll look at things a little differently today in an effort to blend the respective responsibilities of motherhood and childhood as they relate to the need for a basic comprehension of personal financial matters. In simple language, mothers and "children" (of all ages) need a much better understanding of the financial implications of all that we do.

And for all of us non-mothers, let's stop blaming Mom for any problems we're having managing "my own money," aka MOM.

"Finally, mothers and their children agree on something: Each
blames the other for the family’s bad finances. The truth, experts say, is
they’re both right.

Some 67% of kids see their mother as someone who is intimidated by money,
views managing money as a necessary evil or — in their children’s opinion — has
never had to manage money, a survey by the National Foundation for Credit
Counseling. “Perhaps the ideal gift this Mother’s Day is a lesson in personal
finance,” says Gail Cunningham, spokesperson for the foundation. The survey
didn’t ask children about their fathers.

That’s not to say the kids are right, of course. In fact, mothers are equally
critical of their offspring. They say only one-third of their children are
financially prepared for their future, according to a separate survey conducted
by McGraw-Hill Federal Credit Union. Some 44% of moms believe their children
will not be able to finance college, and 49% of mothers say their children are
unprepared to get a job. To be fair, the post-college job market is highly
competitive. The starting salary for a grad is $27,000, 10% less than five years
ago, a recent Rutgers University study found.

So who’s right — mother or child? “They’re both correct,” says Brad Klontz, a
psychologist and financial planner. “Parents would rather talk to their children
about sex than about money.” A mother is less likely to talk about financial
issues with her child if there are money problems at home. “If your son or
daughter leaves home without learning how to drive and gets behind the wheel of
a car, of course they’re going to wreck it,” Klontz says. “But parents should
not use their children as a financial planner or a therapist.”

“Adults should be put in financial time out,” Cunningham says. “They are in
charge of providing sound financial advice to their children. I land on the side
of personal responsibility.” About one-third of people learn their financial
skills from their parents, the NFCC survey found, and nearly half of all adults
grade themselves with a C, D or F for personal finance knowledge. That said,
many parents had to learn through trial and error: Less than half of U.S. states
require a course in personal finance to graduate from high school."

Summing Up

Happy Mother's Day!And let's encourage all family members, including Moms, Dads and children to become more familiar with their personal financial affairs and decisions, helping each other all along the way.That's what families do.